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Should We Celebrate the Federal Income Tax?

This month marks the 100th anniversary of the federal income tax. Curious about its origins and development? Molly Michelmore, an associate professor of history at Washington and Lee University and former Miller Center Fellow, offers her views in the Washington Post.

The federal income tax was once quite popular. According to Michelmore:

After the Civil War, the federal government relied on a combination of consumption taxes and high tariffs to raise revenue. Both bore most heavily on regular people while doing little to tap the fortunes of the Gilded Age’s robber barons.

Popular hostility toward these moneyed interests helps explain the initial popularity of the income tax. In their 1892 platform, a group of agrarian radicals known as Populists demanded a graduated income tax to bring an end to “oppression, injustice, and poverty” and to restore “equal rights and equal privileges for all.” Republicans and Democrats took notice; in 1894, Congress imposed a 2 percent tax on incomes over $4,000.

After the Supreme Court ruled the legislation unconstitutional, Congress sent an income tax amendment to the states for ratification. On February 3, 1913, the 16th amendment was ratified. According to Michelmore, it wasn’t until post-World War II that income tax declined in popularity as a result of liberals divorcing economic security and mobility from the burden of taxation.